Bill to cap and continue SC’s affordable housing tax credit program advances to Senate floor
COLUMBIA, S.C. (WIS) - South Carolina lawmakers are under a tight deadline to keep a program going that promotes the development of affordable housing across the state.
The Senior Affordable Housing Act’s tax credit program — which was passed into law in 2020 and has led to the development of nearly 10,000 new affordable housing units in just the last two years, according to housing advocates — offers developers 10-year state tax credits to build affordable housing, in addition to credits they could receive from a similar program through the federal government.
But with that popularity has come a steep cost: State economists estimated about $25 million worth of credit was approved in the last fiscal year, significantly more than their initial projections before the bill became law in 2020. Earlier this year, a powerful state fiscal board paused the program to reevaluate its expenses.
“If you don’t get this legislation through, the moratorium’s going to stay in place, or the program’s going to go away. There’s not any good solution or program if you don’t have this alternative,” Sen. Nikki Setzler, D – Lexington, said during a Senate Finance Committee meeting on the bill.
The legislation, sponsored by Senate Finance Committee Chair Harvey Peeler, R – Cherokee, and Senate President Thomas Alexander, R - Oconee, would put a yearly $15 million cap on the credits awarded, and a certain percentage of those credits would be reserved for rural areas. Neither limits had been previously in place.
While the state formerly awarded credits on a first come, first serve basis, the bill would put a competitive process in place, stating a project “at the highest value and greatest public benefit,” according to Setzler.
It would also set aside $100 million for applications that were approved by the end of last year but have not been able to use the tax credits since the state moratorium went into effect.
“We had not one person who was opposed to this program, and in fact, the reverse is true, that everybody believes that affordable housing is an absolute necessity in South Carolina today to move us forward and particularly to have the workforce development that we need relative to the economic develop that has occurred and is occurring in South Carolina,” Setzler said.
Some senators wanted to see the cap raised higher than the $15 million limit but said they recognize this amount gives the bill its best shot at being passed, keeping the tax credit program alive. Housing advocates, developers, and attorneys had asked lawmakers to reconsider that cap in an earlier subcommittee meeting.
“A little of something is better than a lot of nothing, and we would end up with nothing if we aren’t careful,” Sen. Darrell Jackson, D – Richland, said.
If the bill passes the Senate, it would head over to the House of Representatives, which is already working on its own affordable housing tax credit legislation.
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